Veteran financial advisor Ric Edelman is challenging traditional portfolio guidance, asking advisors to recommend crypto allocations as high as 40%.
Key Takeaways:
Ric Edelman now recommends crypto allocations of up to 40%, a shift from his 1% guidance.
He says Bitcoin’s mainstream adoption has resolved past uncertainties.
Crypto’s uncorrelated performance can boost diversification.
“Today I am saying 40%, that’s astonishing,” Edelman told CNBC’s Crypto World this week. “No one has ever said such a thing.”
In his 2021 book The Truth About Crypto, Edelman suggested allocations as low as 1% were appropriate, reflecting the uncertainties that clouded the market just a few years ago.
Edelman: Crypto’s Rise Justifies 40% Allocation
Edelman, who leads the Digital Assets Council of Financial Professionals, said the dramatic change stems from what he described as the industry’s transformation.
“Four years ago, we didn’t know if governments would ban Bitcoin, if the technology would fail, or if institutions would adopt it,” he said.
“Today, all those questions have been resolved. It’s radically changed and is now a mainstream asset.”
Signs of crypto’s mainstream arrival are evident in the surge of inflows into spot bitcoin ETFs, which have pulled in billions this year and are among the top-performing asset classes for new investments.
The influx has put crypto firmly on the radar of advisors and institutional investors.
Edelman also highlighted a broader trend reshaping investment strategy: the erosion of the traditional 60/40 portfolio split between stocks and bonds.
Longer life expectancies, with projections suggesting people could live to 100 in coming decades, mean that retirees will need higher returns for longer periods.
“Today’s 60-year-old is kind of like yesterday’s 30-year-old,” he said. “You need to get better returns than you can get from bonds and you need to hold equities longer than ever before.”
In this environment, Edelman argued, crypto’s role becomes indispensable.
He pointed out that Bitcoin’s price movements are uncorrelated with traditional assets, making it a powerful diversification tool that can enhance portfolio risk-adjusted returns.
“The crypto asset class offers the opportunity for higher returns than you’re likely to get in virtually any other asset class,” he said.
Edelman Calls Bitcoin Price Forecasts Conservative
With some market watchers forecasting bitcoin prices could reach $150,000-$250,000 by year-end — and even $500,000 by the end of the decade — Edelman called these projections “conservative” compared to other bullish estimates.
As reported, Shunyet Jan, Head of Derivatives at Bybit, has projected that Bitcoin could reach $125,000 by the end of Q2 if current trends persist.
Likewise, crypto analyst Scott Melker has said he believes Bitcoin could surge to $250,000 by the end of 2025, driven by institutional demand and a maturing market structure.
Despite growing interest in Bitcoin, not everyone in traditional finance is convinced of its long-term staying power.
As reported, Eric Semler, chairman of Semler Scientific, has said that many hedge funds remain skeptical about Bitcoin’s long-term viability, believing it may lose momentum after the Trump administration.
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